The recent High Court case of Royal Commonwealth Society for the Blind v Beasant and Davies  EWHC 2315 (Ch) revisited the issue of interpreting nil-rate band provisions in Wills. Master Shuman held that a gift in the Will of the late Mrs Audrey Arkell should be construed as a gift limited to the amount of any available nil-rate band rather than a sum equal to the nil rate band at the date of the deceased's death.
The late Mrs Audrey Arkell executed her Will in June 2016 and died in August 2017. The value of Mrs Arkell’s estate before inheritance tax was in excess of £3 million. The nil-rate band at the date of Mrs Arkell’s death was £325,000.
Mrs Arkell’s Will provided for specific gifts of an apartment (worth £240,000), shares (worth over £218,000) and personal items (valued at £1,390) to her friend, John Wayland Beasant, free of tax. Various pecuniary legacies were left to six other individuals, totalling £45,000 and were also expressed to be free of tax. The residuary of Mrs Arkell’s estate was gifted equally between 21 named charities, The Royal Commonwealth Society for the Blind being one of those residuary beneficiaries.
Mr Beasant argued that clause 4 of Mrs Arkell’s Will meant that he should receive £325,000 (the amount equal to the full nil-rate band in force at the date of death) free of inheritance tax in addition to the other gifts listed above and argued that clause 4.1 of the Will should be ignored as ‘unnecessary’.
The relevant provision in the late Mrs Arkell’s Will read as follows:
"4. I GIVE the Nil-Rate Sum to my Trustees on trust for my said friend JOHN WAYLAND BEASANT
4.1 In this clause 'the Nil-Rate Sum' means the largest sum of cash which could be given on the trusts of this clause without any inheritance tax becoming due in respect of the transfer of the value of my estate which I am deemed to make immediately before my death"
The High Court accepted The Royal Commonwealth Society for the Blind’s construction of clause 4 and found that if Mrs Arkell had intended to gift the nil rate band to Mr Beasant, “the will could simply have said that”. It was held that clause 4 of the Will provided for a gift of the amount of available nil rate band, if any. Therefore, as the value of the other legacies exceeded the nil rate band, the legacy under clause 4 to Mr Beasant was nil. Master Shuman commented “It would do considerable violence to the language of the will to effectively read clause 4 as meaning a sum which equates to the nil rate band at the date of death of the deceased and to ignore sub-clause 4.1 in its entirety.”
You can read the judgment here.
In cases where a Will has been professionally drafted by solicitors and the interpretation of the nil-rate band provision is challenged, it may be helpful to review the Will file in order to uncover whether the testator intended a different outcome from that resulting from the wording of the relevant provisions in the Will.
If you have any queries in relation to the above or would like further information, please contact Alice O’Mahony at firstname.lastname@example.org.